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Creative Accounting: Some Ethical Issues of Macro- and Micro-Manipulation.

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Title: Creative Accounting: Some Ethical Issues of Macro- and Micro-Manipulation.
Authors: Gowthorpe, Catherine1 cgowthorpe@brookes.ac.uk, Amat, Oriol2,3,4 oriol.amat@upf.edu
Source: Journal of Business Ethics. Mar2005 Part 1, Vol. 57 Issue 1, p55-64. 10p.
Subject Terms: *Corporation reports, *Financial management, Manipulative behavior, Accounting ethics, Accounting standards, Financial statements, Business records, Corrupt practices in accounting, Corrupt practices in corporate accounting, Financial disclosure, Business ethics, Financial statement laws, Management
Abstract: Preparers of financial statements are in a position to manipulate the view of economic reality presented in those statements to interested parties. This paper examines two principal categories of manipulative behaviour. The term `macro-manipulation' is used to describe the lobbying of regulators to persuade them to produce regulation that is more favourable to the interests of preparers. "Micro-manipulation" describes the management of accounting figures to produce a biased view at the entity level. Both categories of manipulation can be viewed as attempts at creativity by financial statement preparers. The paper analyses two cases of manipulation. First, it describes a recent case of significant and successful lobbying against the accounting regulator in the USA. The second case examines some recent Spanish earnings manipulation to demonstrate the effects of biased reporting at the entity level. Both types of creativity are considered in an ethical context. The paper concludes that the manipulations described in it can be regarded as morally reprehensible. They are not fair to users, they involve an unjust exercise of power, and they tend to weaken the authority of accounting regulators. [ABSTRACT FROM AUTHOR]
Copyright of Journal of Business Ethics is the property of Springer Nature and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
Database: Education Research Complete
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  Data: Creative Accounting: Some Ethical Issues of Macro- and Micro-Manipulation.
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  Data: Preparers of financial statements are in a position to manipulate the view of economic reality presented in those statements to interested parties. This paper examines two principal categories of manipulative behaviour. The term `macro-manipulation' is used to describe the lobbying of regulators to persuade them to produce regulation that is more favourable to the interests of preparers. "Micro-manipulation" describes the management of accounting figures to produce a biased view at the entity level. Both categories of manipulation can be viewed as attempts at creativity by financial statement preparers. The paper analyses two cases of manipulation. First, it describes a recent case of significant and successful lobbying against the accounting regulator in the USA. The second case examines some recent Spanish earnings manipulation to demonstrate the effects of biased reporting at the entity level. Both types of creativity are considered in an ethical context. The paper concludes that the manipulations described in it can be regarded as morally reprehensible. They are not fair to users, they involve an unjust exercise of power, and they tend to weaken the authority of accounting regulators. [ABSTRACT FROM AUTHOR]
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  Data: <i>Copyright of Journal of Business Ethics is the property of Springer Nature and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract.</i> (Copyright applies to all Abstracts.)
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      – TitleFull: Creative Accounting: Some Ethical Issues of Macro- and Micro-Manipulation.
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              Text: Mar2005 Part 1
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